France's honest tax system crusader convicted for hiding millions of euros

Jérôme Cahuzac, appointed by Hollande to lead clampdown on wealthy avoiders, hid cash in a secret Swiss account for 20 years

The Guardian, Angelique Chrisafis in Paris, 8 December 2016

Jérôme Cahuzac leaves court in Paris during his trial. Photograph: Francois Mori/AP

Jérôme Cahuzac, the minister who led François Hollande’s drive for a more honest tax system, has been sentenced to three years in prison for tax fraud and secretly stashing his wealth in tax havens around the world.

The deeply damaging saga, in which Cahuzac spearheaded the left’s crusade against tax avoidance while secretly hiding millions of euros of his own money from French tax authorities, was the biggest scandal to hit Hollande’s presidency.

Cahuzac was appointed Hollande’s tax tsar in 2012 to lead the Socialist president’s crusade against wealthy tax-avoiders and make the rich pay their share of dragging France out of its economic woes.

But in 2013 he was forced to admit he had hidden his own money in an account in Switzerland for 20 years and lied about it to parliament. The saga wrecked Hollande’s carefully crafted reputation as a straightforward “Mr Normal” who would oversee an honest government. It increased the public mistrust in France’s political class.

Cahuzac and his ex-wife, Patricia Ménard, who was also jailed, jointly ran a hair-transplant business treating some of France’s biggest celebrities. They were found guilty of tax fraud, tax evasion and laundering the proceeds. They hid millions of euros from the tax authorities for two decades, moving their money across the world from Switzerland to Singapore and the Isle of Man.

The prosecutor Jean-Marc Toublanc said during the trial this autumn that Cahuzac’s family life “was rooted in fraud for 20 years”. Cahuzac wept in the dock while giving evidence and hinted he had considered taking his own life rather than admit to lying. By the end of the trial he had repeatedly admitted his “inexcusable wrongdoing” and described it as a kind of “mechanical action” that was “very hard to stop”.

Cahuzac, 64, was a cardiologist who became a plastic surgeon and made a fortune as Paris’s leading hair transplant expert in the 1990s. At his surgery near the Champs-Élysées, he restored the balding crowns of big names in showbusiness and politics while pursuing his own distinguished political career.

When Hollande named him as budget minister to lead France’s clampdown on tax evasion, it was one of the most important appointments in government. Cracking down on financial corruption and taxing the mega-rich had been Hollande’s election rallying cry.

But in December 2012, months after Hollande’s election, the respected investigative website Mediapart revealed that Cahuzac had been hiding his money. From 1992 he had held an undisclosed account at the Swiss bank UBS that contained €600,000. He had travelled to Geneva to close it and transfer the money to Singapore just before he was made head of the parliamentary finance commission in February 2010, Mediapart said.

Cahuzac furiously denied the allegations. In a four-month campaign to protest his innocence, he lied to parliament, saying he had never hidden money in Switzerland. He went on all major television stations to continue this lie and was said to have reassured Hollande he was telling the truth. The government stood by him for months, including when he resigned claiming he was innocent and needed to devote himself to fight the allegations.

Then Cahuzac made a sudden public confession in April 2013, saying he did have the account; had defrauded the taxman and had been “caught in a spiral of lies”. There could not have been a more damaging scandal for the left.

In court, Cahuzac said he had stashed funds offshore to maintain his family’s standard of living, which included buying apartments for the children in London and Paris and taking holidays in Mauritius.

In one episode, Cahuzac, using the codename Birdie, allegedly received two cash payments of €10,000 in envelopes handed over by a bank contact on the streets of Paris. The couple used a Royal Bank of Scotland account in the Isle of Man to channel cheques from English hair transplant clients. As their marriage began to falter, Ménard also opened an account in Switzerland.

Ménard’s lawyer, Sebastien Schapira, told the court the money was “that of fraud, but initially it was that of her work, earned day after day, hour after hour, hair by hair”. He described Ménard as “naive”, an unwitting accomplice who was “swept up” in the fraud before confessing to it in December 2013.

She testified that the couple had become locked in a spiral of wrongdoing. “I’m extremely ashamed of having done all that,” Ménard said.

After the Cahuzac scandal broke, Hollande reinforced measures on financial corruption, ethics and transparency in political life.